India will prosecute any company
that violated rules for obtaining mobile-phone licenses from
2001 and won’t spare those found guilty, Communications and
Information Technology Minister Kapil Sibal said.

“There should be a message that those who have done wrong
and will do wrong will not be spared,” Sibal told Bloomberg-UTV
in an interview aired today.

Prime Minister Manmohan Singh’s government has come under
fire from opposition parties and the nation’s chief auditor for
the way airwave permits were awarded in 2008. India’s highest
court has said it will directly monitor a federal probe into the
sale of wireless licenses and yesterday ordered investigators to
submit a progress report by its next hearing on Feb. 10.

The court’s move raises scrutiny on the probe of a scandal
that’s roiled India’s phone industry, led to the resignation of
Sibal’s predecessor Andimuthu Raja and subsequent searches of
Raja’s residences, and stalled parliamentary proceedings.

India’s top auditor said last month the sale of 157 permits
at “unbelievably low” prices two years ago deprived the
treasury of as much as 1.4 trillion rupees ($31 billion).

The government was now focused on restoring confidence in
the industry and ensuring that the ministry would “function in
a transparent, open and non-discriminatory manner,” Sibal said.

‘Industry Survives’

“I want to make sure that the industry survives," he said.
"We should not send a message to the industry that we are not
bothered about the survival of the industry, or all we are
bothered about is sending people to jail.”

The Comptroller and Auditor General of India said in its
report the government sold wireless airwaves in 2008 for 123.9
billion rupees, though they could have earned as much as 1.5
trillion rupees from the sale. Raja has denied any wrongdoing.

The auditor also said that the government awarded licenses
to 13 ineligible companies at the time. Two of those permits are
currently used by units of Norway’s Telenor ASA and Emirates
Telecommunications Corp.

The Telenor and Etisalat units said Dec. 14 they will prove
the validity of their mobile-phone licenses to the government
after the Department of Telecommunications gave the carriers 60
days to prove they followed rules in getting the permits.

Sibal said any changes in the ministry’s rules would occur
after due consultation with the industry and consumers.

The aim will be to ensure “people will have confidence in
the fact that I am taking these decisions to create a level
playing field,” he said. “And I am going to take these
decisions after a dialogue and through a transparent process.”